Project xCloud will let anyone anywhere instantly sample Xbox games before they buy, making it a tremendously potent tool for Microsoft's ecosystem.
Xbox Game Pass is one of the most powerful services in the industry right now. It's an all-you-can play subscription that gives you access to a pool of full games to download and play at any time. Because access isn't permanent and dependent upon a continual monthly fee, Game Pass has sparked full game sales as players buy the games they want to keep forever. But Game Pass is missing something big: Instant access.
That's where Project xCloud, Microsoft's new cloud game streaming service, comes in.
Project xCloud and Game Pass are two parts of the same whole, two sides of the same coin--you get the idea. They complement each other like yin and yang and will synergize to tremendously boost two of the most important cornerstones of the modern games industry: Access and visibility.
Project xCloud is all about instant access. There's no downloads here, no waiting: Just fire up xCloud, pick a game, and Microsoft's powerful servers will beam it to you wirelessly over the internet regardless of what device you're on. It'll allow users to sample a ton of games without specific hardware barriers. But there's trade-offs here. Project xCloud is obviously at the mercy of a user's connection, and latency issues could cause lots of lag and interruption.
Game Pass, however, uses dedicated hardware to play its games for a more consistent experience. The access comes after the initial download. You can also play the games offline. But the trade-off there is you need actual games hardware like a PC, laptop, or Xbox console.
Right now Game Pass is the access and visibility point.
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But that scope will soon be orders of magnitudes bigger with xCloud. One of the biggest mechanisms to access and visibility is in the xCloud app, which lets you launch a game directly after watching a trailer for said game. This alone will be powerful.
"The xCloud scenario on a console makes a ton of sense. In our preview, which is going incredibly well with hundreds of thousands of users, we watch people sample games. We see that in Game Pass today, even on console. We call it the hummingbird effect. People are willing to try more games, but obviously you have the download time," Phil Spencer said in a recent IGN Unlocked interview.
"On xCloud, you definitely get people who are sampling more games and I think that's healthy for our industry. I think the ability to try new games more quickly, the discoverability of new games whether it's on a console or a PC or a phone, will just be fantastic."
Mobile on-the-go gaming will be the most accessible point for xCloud, but Project xCloud's most compelling use-case is consoles. It's here where xCloud will mimic Game Pass and inspire full game sales. The idea is simple: Gamers buy into Project xCloud, try out a bunch of games, and buy the ones they like.
It goes deeper than that though. The xCloud-Game Pass tag-team duo has lots of flexibility. If gamers aren't yet committed to the games they try on xCloud, they could just download the games on Game Pass and play it for a bit more. Final decisions could lead to a full game purchase after the initial subscription fees have been paid.
This cyclic business model isn't new for Microsoft. It's called the Gamer's Journey, and it's the core of Xbox platform's synergized services, games, and hardware ecosystem.
The idea is to give consumers lots of options and opportunities to get "sticky" within the network, whether it be services they've paid up to sample games, titles they've bought and invested in, or social connections they've made along the way. The more layered this ecosystem is, the harder it is to un-stick yourself from.
That's really the core of the business model: To create this feeling of investment that consumers don't want to abandon.
Project xCloud is a new fundamental layer of this model that will perfectly complement Game Passes' strengths and weaknesses, all while boosting full game sales and providing steady consistent subscription revenues over time. And for Microsoft, that's the name of the game.
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